Sula (AIM: SULA), the gold exploration company focused on Sierra Leone, has signed a new 5,000m drilling contract with Equity Drilling (“EQD”) on its flagship Ferensola gold project (“Drill Contract”). The drilling will primarily focus on Sula’s TZ0, Sanama Hill targets.
The programme will aim to infill and extend the areas of known high grade mineralisation and to improve the confidence in the geological interpretation and support a more accurate determination of the contained gold. Sula may also undertake further scout drilling on targets within the Ferensola licence. The scout drilling will be designed around the pending Batch 2 assay results, and after the completion of a review of all data collected to date by Tect Geological Consulting, a South African based structural geology firm. Re-commencement of drilling is planned in the next fortnight subject to weather conditions.
The Drill Contract was awarded following a competitive tender between a number of drilling contractors.
Roger Murphy, CEO of Sula commented:
“We are pleased to be able to announce a further drilling programme focussed on Sanama Hill, and also aimed at the other compelling targets touched upon by our recently completed programme. Equity Drilling has once again provided a convincing, flexible proposal which will allow further drilling before the rainy season.
We see the recently reported 21m true width intersection at 3.65g/t with a high grade core of 15.9g/t over 3.1m as a complete game changer in terms of our assessment of Sanama’s potential. We are convinced that there are more like this to be found at Sanama Hill and elsewhere and hope that our new drilling programme confirms this.”
The Drill Contract is a related party transaction under the AIM Rules for Companies due to EQD being wholly owned by Mike Warren, who also has a 50% interest in Galactic Tide Ltd, a substantial shareholder in the Company. Iain Mcpherson has a material interest in Galactic Tide, and accordingly is not independent for the purposes of considering the Drill Contract. The independent directors of the Company (being all of the Directors except for Iain Macpherson) who, having consulted with WH Ireland, the Company’s nominated adviser, consider the terms of the Drill Contract to be fair and reasonable insofar as the Company’s shareholders are concerned.
The terms are similar to the previous contract with EQD whereby approximately half of the total contract cost is payable in Sula shares at the completion of the programme, with the cash component payable in increments as the programme advances. The USD 0.7m contract comprises staged cash payments and the issue of ordinary shares of two tranches, following completion of the drilling, at the prevailing market price (one of which will be after the results of the program have been notified to the market).
Sula Iron & Gold plc is a gold focused exploration company focused on West Africa. The Company’s main objective is to explore and advance its 153km2 Ferensola Project in Northern Sierra Leone. In June 2015, the Company defined a JORC Exploration Target on its Ferensola Gold Project. The Exploration Target centres on Sanama Hill, with a tonnage range of between 5 and 7 million tonnes (“Mt”), grading at between 4 and 8 g/t Au, which equates to between 0.8 and 1.5 million ounces (“Moz”) Au. The Exploration Target was restricted to a 2km strike length segment of the regional fold belt that is believed to extend for over 10km.
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